TINUBU SEEKS REPS’ APPROVAL FOR N10.79TN EXTERNAL BORROWING
Read Time:2 Minute, 49 Second
By ‘Balogun Ibrahim
President Bola Tinubu has asked the House of Representatives to approve the implementation of the N10.79tn ($7.7bn) external borrowing component of the 2026 Appropriation Act.
The request, contained in a letter addressed to the Speaker of the House, Tajudeen Abbas, seeks legislative authorisation for the Federal Government to raise $7.707bn at the budget exchange rate of N1,400 per dollar to finance part of the 2026 budget deficit.
Tinubu clarified that the request was not a fresh borrowing proposal, noting that the National Assembly had already approved the amount and incorporated it into the 2026 Appropriation Act.
He explained that the current request was necessary to satisfy the statutory provisions of Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003, which mandate parliamentary approval of the terms and conditions governing external loans.
According to the President, Section 21(1) bars the Minister of Finance from obtaining or approving external loans without first presenting their terms and conditions to the National Assembly for approval.
He added that Section 27(1) empowers the legislature to approve standard terms and conditions for negotiating and accepting external loans, as well as issuing guarantees.
The President recalled that the 2026 Appropriation Act provided for N29.218tn in new borrowings to finance the budget deficit, comprising N18.28tn in domestic loans and N10.79tn in external borrowing.
He said the Federal Government would explore multiple financing options simultaneously, considering their costs, benefits and the time required to secure the funds.
However, Tinubu indicated that the government would prioritise Eurobond issuance, citing its relatively faster execution and potential to provide access to larger financing at lower costs.
On the proposed Eurobond, he noted that the final terms and conditions would be determined during pricing, depending on prevailing market conditions.
He assured that the Federal Ministry of Finance and the Debt Management Office would work towards securing the most favourable terms available in the international market.
The letter stated that the external borrowing would fund projects and programmes captured in the 2026 budget, particularly in critical sectors such as defence and security, transportation, agriculture, power, education and health.
Tinubu said the funds would also support the government’s efforts to stabilise and consolidate ongoing macroeconomic reforms.
He further argued that the borrowing would help boost Nigeria’s external reserves, as the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby supporting the stability of the naira.
In the proposed resolution, the President asked the House to authorise the Federal Government to raise the N10.79tn through one or more financing channels.
The proposed sources include conventional and commercial facilities from multilateral and bilateral institutions, the International Monetary Fund, bridge financing arrangements and direct loans from international institutions, with particular emphasis on Eurobond issuance.
He also sought approval for the Minister of Finance and Coordinating Minister of the Economy, in conjunction with the Debt Management Office, to take all necessary steps to implement the resolution once approved by the National Assembly.
The President emphasised that the request was distinct from his separate borrowing proposal, which is still before the legislature for consideration.
He maintained that the latest request neither replaces nor withdraws the earlier proposal but specifically seeks the statutory authorisation required to execute the external borrowing already provided for in the 2026 Appropriation Act.
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